> For the complete documentation index, see [llms.txt](https://docs.meridianfinance.net/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.meridianfinance.net/the-usdmst-token/usdmst-buybacks.md).

# $MST Buybacks

As a finance protocol, it's no surprise that Meridian leverages its revenue and TVL to generate fees. At Meridian, these fees are strategically used to reward $MST holders for their participation in the ecosystem. Through extensive research and experience, we've found that the most lucrative approach for both individual and institutional investors is a combination of real yield paid via [staking](/the-usdmst-token/staking-rewards.md), consistent price growth driven by [weekly buybacks](/the-usdmst-token/usdmst-buybacks.md), and strategic [partnership deals](/the-usdmst-token/parterships.md).

Since November 2024, we transitioned to using buybacks as a way to reward $MST holders. These buybacks are fully transparent, announced every Wednesday on Meridian's social media accounts, and tracked on the buybacks dashboard [here](https://flipsidecrypto.xyz/pepperatzi/meridian-finance-buybacks-wI8TCu). Recent buyback activity suggests Meridian is on pace to achieve an annual deflation rate of approximately 5% of the max supply (10 million tokens) and around 25% of the circulating (unstaked) supply.

<figure><img src="/files/r96xQv322ynIHgmVObIT" alt=""><figcaption></figcaption></figure>

Meridian's weekly buybacks are funded by four primary revenue sources, each contributing flexible percentage:

1. **MST-ETH Liquidity Pool**: $AERO generated from trading fees and liquidity provision on Aerodrome.
2. **Meridian Lend Reserve Factor on Incentivized Markets**: Income derived from reserve fees collected on lending activities within incentivized markets.
3. **USDM Redemptions & Mints**: Fees earned through the minting and redemption of USDM stablecoins.
4. **Partnerships**: Additional contributions from collaborative efforts with ecosystem partners.

This balanced approach ensures sustainable and consistent funding for weekly buybacks.

**Do note:** All buybacks are made on the open market [DEX pairs](https://aerodrome.finance/swap?from=eth\&to=0x2f3b1a07e3efb1fcc64bd09b86bd0fa885d93552).

<figure><img src="/files/700RKyl3xTttL2FN6Jke" alt=""><figcaption></figcaption></figure>

**Objective: To measure the efficiency and impact of buybacks funded by Meridian Finance revenue on the MST ecosystem.**

-Total MST Bought Back: Monitor the cumulative number of MST tokens repurchased.\
\- Revenue Allocation: Break down the revenue streams contributing to the buyback fund (e.g., lending fees, trading fees).\
\- Average Buyback Price: Calculate the average MST price at the time of each buyback to assess cost-effectiveness.

Market Impact:

\- Price trends before and after buybacks.\
\- Liquidity changes in MST trading pairs.\
\- Circulating Supply Reduction: Analyze how buybacks influence the circulating supply of MST over time.\
\- Protocol Revenue Growth: Measure the correlation between increased revenue streams and buyback capacity.